Question: Inventory Given: HP DeskJet 7000C Printers Average weekly demand = 60 printers Standard deviation of weekly demand = 12 printers Order lead time = 3

  1. Inventory

Given: HP DeskJet 7000C Printers

Average weekly demand = 60 printers

Standard deviation of weekly demand = 12 printers

Order lead time = 3 weeks

Standard deviation of order lead time = 0 weeks

Item cost = $120/printer

Cost to place an order = $2

Yearly holding cost = $48/printer

Desired service level = 99% (z = 2.33)

Part a: Find the EOQ

Part b: Calculate the order costs and holding costs. What do you notice?

Part c: Suppose OfficeMax currently orders 120 printers at a time. How much more or less would it cost versus ordering 12 printers at a time?

Part d: What is the reorder point for the printer? How much is safety stock?

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